CCT SAVINGS 'SUBSTANTIAL' AND TUPE HAS GONE TOO FAR, SAYS BALDRY

The Government is determined that Compulsory Competitive Tendering should continue to work for the benefit of local...

The Government is determined that Compulsory Competitive Tendering should continue to work for the benefit of local residents, local authorities and the private sector, Environment Minister Tony Baldry said today.

Addressing the CBI conference on CCT Mr Baldry said:'We are coming to a time when a great deal of local authority business will be coming on to the market. CCT was extended to local authorities' blue collar services in 1988. This business is now coming up for its second cycle of tendering, approximately £1.8 billion worth of contracts.

'We are also introducing CCT for Housing Management, and for a wide range of councils' white collar work in a phased programme, with tenders starting to come forward next summer. These are very large areas of council activity - worth well over £5 billion a year.

'The savings for local authorities can be substantial. Costs have been reduced by an average of 7%, and up to 20% for some of the services - refuse collection, building cleaning and grounds maintenance. These are large savings which can be applied for the benefit of local people.

Quality is also higher, with local authorities setting specifications at or in most cases above the existing standards, and in the great majority of contracts, the specification was fully delivered.

'Alas, there are still a number of councils which try to flout the rules. It is my job to tackle these authorities, and tackle them I shall. The DoE unit which deals with investigation and enforcement of CCT rules has been increased in strength, and cases will be dealt with speedily and thoroughly.Most cases can be resolved in correspondence with the council concerned, and where appropriate I shall issue notices and directions.'

Mr Baldry said he was also determined to ensure that local councils' DSOs achieve the specified financial rate of return. Each successive financial year, the government has tightened the criteria for taking actionagainst DSOs that don't achieve a proper rate of return, he said.

'For many the main issue with CCT is TUPE - and our policy is clear. We believe that it is not appropriate for the EC Acquired Rights Directive to have developed beyond its original focus on company takeovers. We do not think that it should apply to the contracting out of services for a fee, and we believe that such constraint is reducing competition to the detriment of consumers.

'We believe that the Acquired Rights Directive should be amended to exclude the contracting-out of services, and should in the process be clarified, so that people can know what the law means, without having to refer cases constantly to judges.

'Until the Directive is amended, it remains the law, and we must operate within it. As to clarity about the facts, we issued guidance in March this year, with the best analysis we could make of the factors which are relevant in assessing whether or not a transaction involves the transfer of an undertaking.

'Earlier this month, I also issued a set of draft ground rules, a round-up of the handling issues which local authorities and contractors have been encountering. The draft sets out for comment our proposed line on how these different issues should be handled.

I discussed the draft at my recent meeting with the CBI and industry organisations, and I have invited speedy comments on our proposals. I intend to finalise the guidance and get it into operation as soon as possible. My guidance will make it very clear what conduct I shall consider as constituting anti- competitive behaviour.

'The expansion of CCT will mean substantial business opportunities ahead. There is clear evidence of the success and benefits of CCT. Benefits for local people. I am determined to take action to ensure fair competition, and to ensure that CCT is not frustrated by uncertainty on TUPE.'

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